Latinos Debate Free Trade's Cost

CAFTA Alternately Seen as an Engine Of Progress, Poverty

NEW YORK -- In the Dominican enclave of Upper Manhattan, where street life thrives on mom-and-pop stores and the sound of bachata, trade debates are scrutinized through the lens of daily survival in the city and on the island.

"You have to be in the global marketplace," said Jorge Defrank, a bodega clerk in Washington Heights, referring to the Dominican Republic's economy. "It could help increase exports."

"That's not what you said last time!" admonished Luis Lora from across the counter. "They won't be able to compete. They aren't in the condition to get into the global marketplace."

Lora worries about his real estate investments on the island. "The small businesses will disappear," he said. "I have to think about the consequences over there."

The battle over the proposed Central America Free Trade Agreement, which would sharply lower trade barriers between the United States and five Central American nations and the Dominican Republic, is the talk of Latinos in New York, where Hispanics are estimated to make up 28 percent of the population.

It's debated by sidewalk pundits and on Spanish-language radio shows. It dominates Spanish-language newspaper headlines and has energized evangelical networks in New York and cities from Boston to Washington and Houston to Los Angeles -- anywhere with large populations of Latinos connected by air bridges to Central America and the Dominican Republic.

For some Latinos with financial and familial connections in CAFTA countries, the trade agreement inspires optimism that open markets will create business opportunities and jobs, and reduce the need for immigration to the north.

But opponents see a far grimmer future. They fear that if promised well-paying jobs fail to materialize, more of their salaries will go to subsidize families abroad through money transfers known as remittances. They warn that the agreement will wreck micro-businesses in Latin America and lead to a profusion of yet more low-wage jobs, which would in turn fuel more migration northward.

There is no debating the pivotal role that U.S. Latinos play in the economies of CAFTA countries. The small fortunes in weekly remittances sent to families in those countries total roughly $10 billion annually, outstripping U.S. direct foreign investment and foreign aid, according to the Inter-American Development Bank, and making Latinos the greatest financial stakeholders in those countries.

Just last week, U.S. Commerce Secretary Carlos M. Gutierrez came to Washington Heights to lobby for the agreement. The week before, Dominican President Leonel Fernandez addressed largely the same Latino business leaders. But CAFTA opponents, including the city's largest union, Service Employees International Union Local 1199, greeted Fernandez with protests.

Gutierrez's visit, however, fell under the radar, and he ate lunch peacefully to the beat of merengue before warning business leaders that a CAFTA defeat would condemn partner nations to the turbulent and war-ridden era of the 1980s.

"We have to think of CAFTA in a comparison to the status quo," Gutierrez said in an interview afterward. "You have a lot of Hispanic American small businesses that understand the consumer, and they are able to make contacts in Central America."